Fenceroy v. Gelita USA, Inc., No. 16-0775

CourtUnited States State Supreme Court of Iowa
Writing for the CourtCADY, Chief Justice.
Citation908 N.W.2d 235
Parties Oliver FENCEROY, Appellee, v. GELITA USA, INC., Tom Haire, and Jeff Tolsma, Appellants, and Bob Kersbergen and Jeremie Kneip, Defendants.
Docket NumberNo. 16-0775
Decision Date23 February 2018

908 N.W.2d 235

Oliver FENCEROY, Appellee,
v.
GELITA USA, INC., Tom Haire, and Jeff Tolsma, Appellants,
and
Bob Kersbergen and Jeremie Kneip, Defendants.

No. 16-0775

Supreme Court of Iowa.

Filed February 23, 2018


Aaron A. Clark of McGrath North PC LLO, Omaha, Nebraska, for appellants.

Stanley E. Munger of Munger, Reinschmidt & Denne, LLP, Sioux City, for appellee.

CADY, Chief Justice.

908 N.W.2d 238

This review presents a significant issue regarding the boundaries of attorney–client privilege and work-product protection. We must decide whether plaintiff’s counsel may depose defense counsel and obtain counsel’s prelawsuit work product. After leaving his job, plaintiff filed an administrative complaint charging his former employer with race discrimination. In response to the charge, the employer hired an attorney to defend the company and investigate the merits of the charge. The employer filed an administrative position statement wherein it relied upon the attorney’s investigation to support its FaragherEllerth affirmative defense. In the subsequent civil action, the employer retained the same attorney and again raised the affirmative defense. The employer claimed attorney–client privilege and work-product protection over the investigation and moved for a protective order to prevent plaintiff from deposing defense counsel and obtaining her investigation notes. Yet, in its motion for summary judgment, the employer again relied upon the investigation to support its defense. The district court denied the protective order, and we granted the employer’s interlocutory appeal.

We conclude the district court did not abuse its discretion by denying the defendants’ protective order. When an employer raises a FaragherEllerth affirmative defense and relies upon an internal investigation to support that defense, the employer waives attorney–client privilege and nonopinion work-product protection over testimony and documents relating to the investigation. On remand, the employer is permitted to amend its answer and brief to limit the affirmative defense to only the period of plaintiff’s employment. If the employer declines to so amend, it may not claim attorney–client privilege or work-product protection over the 2013 investigation, and plaintiff may depose defense counsel as well as obtain counsel’s investigation notes.

I. Factual Background and Proceedings.

Oliver Fenceroy, an African-American man, was employed by Gelita USA, Inc. (Gelita), a maker of gelatin products. He began working at Gelita’s Sergeant Bluff plant in 1975. In this lawsuit, he alleges he experienced consistent racial harassment from coemployees and supervisors throughout his employment. His complaint identified a number of workplace incidents involving racially disparaging comments by employees.

Gelita implemented an antiharassment policy that barred disparate treatment in the workplace on the basis of race. Fenceroy acknowledged receiving a written memorandum that discussed the antiharassment policy in August of 2010. Additionally, Fenceroy attended company trainings in 2011, 2012, and 2013 that discussed workplace harassment. He also received copies of Gelita’s Code of Conduct, which contained the company’s antiharassment policy, in 2011 and 2012. Further,

908 N.W.2d 239

Gelita conducted a survey in 2012 that requested anonymous feedback about potential problems or changes to the company. Fenceroy received the survey but did not report any harassment.

Gelita’s antiharassment policy contained detailed reporting procedures. The policy instructed employees to report any harassment to their supervisors or to the human resources department. If an employee is harassed by his or her direct supervisor, the policy permitted an employee to bypass that individual and report the harassment to the supervisor’s superior.

It is undisputed that Fenceroy only made one complaint to Gelita about racial harassment. In September of 2011, Fenceroy complained to Gelita’s Vice President of Business Support, Jeff Tolsma, about a rope tied on the company’s production floor. Fenceroy believed it represented a noose. Tolsma notified the plant’s production manager, Jeremie Kneip, of the complaint. The two individuals located the rope and determined it was not a noose, but rather a loop used to facilitate pulling a scale downward. Nevertheless, they untied the knot so there was no longer a loop in the rope.

Fenceroy stopped working for Gelita in March 2013. He filed a complaint with the Iowa Civil Rights Commission (ICRC) a short time later. The complaint charged Gelita with race discrimination. Upon receipt of Fenceroy’s ICRC charge, Gelita retained attorney Ruth Horvatich and tasked her with developing a strategy to defend the company during administrative proceedings.

Pursuant to this representation, Horvatich interviewed several Gelita employees to ascertain the merits of Fenceroy’s complaint. Tolsma was present for and participated in each interview. A union representative, John Hoswald, was also present during the employee interviews. At the end of each interview, Horvatich drafted a witness statement that summarized the employee’s account and instructed the employee to sign the document.

Horvatich’s investigation revealed some Gelita employees had made racially disparaging comments in the workplace. Gelita subsequently terminated one employee, Bob Kersbergen, and disciplined others, including Kent Cosgrove, Tom Haire, and Lewis Bergenske. Horvatich did not participate in any of the disciplinary decisions.

On May 30, 2013, Gelita filed a position statement with the ICRC in response to Fenceroy’s discrimination charge. The statement, drafted by Horvatich, addressed the merits of Fenceroy’s racial harassment claim. It argued Gelita could not be held vicariously liable for supervisor harassment because it could assert the FaragherEllerth affirmative defense. Specifically, in discussing the affirmative defense, Gelita argued,

[T]he Company distributed a valid discrimination and harassment policy, which contained flexible reporting procedures and listed individuals that acts of harassment could be reported to, who were in a position to take corrective action. The discrimination and harassment policy also contains detailed procedures relating to the investigation and resolution of complaints. After learning of Complainant’s complaint relating to the rope, the Company took immediate action. The same day of the complaint, the Company performed an investigation and resolved the complaint by untying the knot that was in the rope, which has remained untied since that time. The Company notified the Complainant of this resolution. Additionally, after the Complainant filed the charge at issue with the Iowa Civil Rights Commission, the Company investigated the allegations of harassment, which resulted in
908 N.W.2d 240
the termination of Mr. Kersbergen and the discipline of Mr. Haire, Mr. Bergenske, and Mr. Cosgrove. During his employment, Complainant only made one report of harassment and unreasonably failed to report any other allegations to management, despite the Company’s clear reporting procedures. Thus, it is clear that the Company exercised reasonable care to prevent harassment, promptly corrected any harassing behavior , and the Complainant unreasonably failed to take advantage of the Company’s clear reporting procedures. As a result, the Complainant’s allegation of racial harassment fails.

(Emphasis added.) Thus, the statement Gelita filed with the ICRC signaled it would rely on its investigation into the complaint to help support the first prong of its affirmative defense that it exercised reasonable care to prevent and correct harassing behavior.

At the culmination of the administrative proceedings, the ICRC issued Fenceroy a right to sue. On May 30, 2014, Fenceroy filed a civil action in district court against Gelita and four named employees: Bob Kersbergen, Tom Haire, Jeff Tolsma, and Jeremie Kneip. Fenceroy alleged the defendants engaged in racial harassment in violation of the Iowa Civil Rights Act and he was constructively discharged. He also alleged Kersbergen and Haire engaged in tortious infliction of severe emotional distress.

Gelita again retained Horvatich to defend the company, as well as Haire and Tolsma, in the civil action. The defendants filed an answer that raised a number of affirmative defenses. One defense alleged Fenceroy "unreasonably failed to take advantage of any preventative or corrective opportunities provided by Defendant Gelita"; and Gelita "exercised reasonable care to prevent and promptly correct any harassing behavior."

During discovery, defendants produced the witness statements drafted by Horvatich and signed by the employees during her 2013 investigation. Fenceroy deposed some of the employees Horvatich interviewed during the investigation. He also deposed Tolsma and inquired into the nature and scope of the 2013 investigation, as well as the subsequent disciplinary decisions.

On March 23, 2016, counsel for Fenceroy issued a notice to depose Horvatich. He also requested Horvatich provide "notes from the investigation that resulted in Gelita’s Position Statement," as well as any "notes from interviews" with Gelita...

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6 practice notes
  • Guge v. Kassel Enters., Inc., No. 19-2151
    • United States
    • United States State Supreme Court of Iowa
    • June 18, 2021
    ...raised the issue and that the district court orally ruled on it, thus preserving the issue for appeal. See Fenceroy v. Gelita USA, Inc. , 908 N.W.2d 235, 248 (Iowa 2018).Craig argues—consistent with the thrust of the district court's succinct oral ruling—that Susan and Peggy's arguments see......
  • Guge v. Kassel Enters., Inc., No. 19-2151
    • United States
    • United States State Supreme Court of Iowa
    • June 18, 2021
    ...raised the issue and that the district court orally ruled on it, thus preserving the issue for appeal. See Fenceroy v. Gelita USA, Inc., 908 N.W.2d 235, 248 (Iowa 2018). Craig argues—consistent with the thrust of the district court's succinct oral ruling—that Susan and Peggy's arguments see......
  • Iowa Supreme Court Attorney Disciplinary Bd. v. Barry, No. 17-1415
    • United States
    • United States State Supreme Court of Iowa
    • February 23, 2018
    ...for reinstatement, Barry must provide an evaluation from a licensed health care professional verifying his fitness to practice law.908 N.W.2d 235V. Disposition.We suspend Barry’s license to practice law in Iowa for an indefinite period with no possibility of reinstatement for one year from ......
  • State v. Scalco, 19-1439
    • United States
    • Court of Appeals of Iowa
    • August 18, 2021
    ...to offer evidence to show its attorney conducted an investigation into complaints of sexual discrimination. Fenceroy v. Gelita USA, Inc., 908 N.W.2d 235, 243-44 (Iowa 2018) (citing Harding v. Dana Transport, Inc., 914 F.Supp. 1084, 1096 (D.N.J. 1996)). The case states: Consistent with the d......
  • Request a trial to view additional results
6 cases
  • Guge v. Kassel Enters., Inc., No. 19-2151
    • United States
    • United States State Supreme Court of Iowa
    • June 18, 2021
    ...raised the issue and that the district court orally ruled on it, thus preserving the issue for appeal. See Fenceroy v. Gelita USA, Inc. , 908 N.W.2d 235, 248 (Iowa 2018).Craig argues—consistent with the thrust of the district court's succinct oral ruling—that Susan and Peggy's arguments see......
  • Guge v. Kassel Enters., Inc., No. 19-2151
    • United States
    • United States State Supreme Court of Iowa
    • June 18, 2021
    ...raised the issue and that the district court orally ruled on it, thus preserving the issue for appeal. See Fenceroy v. Gelita USA, Inc., 908 N.W.2d 235, 248 (Iowa 2018). Craig argues—consistent with the thrust of the district court's succinct oral ruling—that Susan and Peggy's arguments see......
  • Iowa Supreme Court Attorney Disciplinary Bd. v. Barry, No. 17-1415
    • United States
    • United States State Supreme Court of Iowa
    • February 23, 2018
    ...for reinstatement, Barry must provide an evaluation from a licensed health care professional verifying his fitness to practice law.908 N.W.2d 235V. Disposition.We suspend Barry’s license to practice law in Iowa for an indefinite period with no possibility of reinstatement for one year from ......
  • State v. Scalco, 19-1439
    • United States
    • Court of Appeals of Iowa
    • August 18, 2021
    ...to offer evidence to show its attorney conducted an investigation into complaints of sexual discrimination. Fenceroy v. Gelita USA, Inc., 908 N.W.2d 235, 243-44 (Iowa 2018) (citing Harding v. Dana Transport, Inc., 914 F.Supp. 1084, 1096 (D.N.J. 1996)). The case states: Consistent with the d......
  • Request a trial to view additional results

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